Expanding Feb private Caixin PMI indicates robust business activity

▶ Manufacturers showing improved outlook: NBS

China’s private Caixin Manufacturing Purchasing Managers’ Index (PMI) recorded a month-on-month expansion in February, pointing to robust business activities among small and private enterprises. The official manufacturing PMI, also released on Friday, indicated a better production outlook following the Chinese New Year holidays.

As the first major economic barometer in February, the PMI showed that the proactive measures taken by the government have taken effect and indicates an overall improvement in the Chinese economy at the start of the year, experts said.

China’s private Caixin Manufacturing PMI reached 50.9 in February, up from 50.8 in January, standing in expansion territory for four consecutive months.

In February, the manufacturing production index, new orders index, and new export orders index expanded by 0.1 to 0.3 points, remaining within expansion range, with the new export orders index reaching a new high in a year, according to the private survey.

The Caixin Manufacturing PMI has been above the expansion line for four consecutive months, the first time since the second half of 2021, indicating an overall improvement in the economy and solid progress in high-quality development, said Wang Zhe, Senior Economist at Caixin Insight Group.

The official manufacturing PMI, released by the National Bureau of Statistics (NBS), came in at 49.1 on Friday, slightly lower from 49.2 in January.

Due to the impact of the Spring Festival holidays, manufacturing production activities have slowed down. However, businesses’ expectations remain stable, showing their increased confidence in market development after the Spring Festival, Zhao Qinghe, an NBS statistician said in a notice on Friday.

Experts said that reports by some foreign media hyping China’s PMI data showing consecutive manufacturing drops are ignoring objective factors.

“As the Chinese New Year holidays fell in February this year, the PMI data for the month is likely to be heavily influenced by seasonal factors and the impact of the holiday on manufacturing activities, raw material procurement, distribution, and recruitment,” Zhou Maohua, an economist from China Everbright Bank, told the Global Times on Friday.

February’s manufacturing PMI met expectations and the service sector even outperformed them, reflecting a better and more optimistic overall economic recovery than the market anticipated, Zhou said.

As long as the policies can be implemented proactively and provide sufficient support during the recovery phase, the economy will see a pretty good performance in the first quarter, Tian Yun, an economist based in Beijing told the Global Times on Friday.